Connecticut approves $2,000 caregiver credit

Connecticut just approved something family caregivers have been asking for for years — a state income-tax credit for the money they spend keeping relatives safe at home. That sounds small, but it fixes a very specific gap. Families buy equipment, pay for respite care, hire aides, and patch together transportation all the time, and most of that spending has landed on them. Now lawmakers have put a credit for some of those costs into the state’s broader affordability package and budget deal. (cga.ct.gov) ### What exactly passed? The key move is Senate Bill 1, an affordability bill the General Assembly adopted as part of the late-budget package on May 2, 2026. It is not a standalone caregiver bill anymore. The caregiver break got folded into a bigger bundle that also expands other tax relief, including the property-tax credit, renter relief, and a full state income-tax exemption for Social Security benefits. (cga.ct.gov) ### What does the caregiver credit do? Starting with the 2027 tax year, Connecticut will allow a nonrefundable state income-tax credit for eligible family caregivers. The credit covers 50% of eligible caregiving expenses, up to a maximum benefit of $2,000. Nonrefundable is the catch — it can reduce what someone owes in state income tax, but it does not create a refund beyond that tax liability. (cga.ct.gov) ### Who can actually claim it? The bill analysis says the credit is aimed at income-eligible family caregivers, with lower thresholds than some earlier proposals. The earlier raised bills floated much broader eligibility, including higher income caps and even a smaller $500 concept in one draft. What survived in the affordability package is the more targeted version — basically relief for lower- and middle-income households rather than a universal benefit. (cga.ct.gov) ### What counts as a caregiving expense? The underlying caregiver language gives a pretty practical list. Eligible expenses can include things like a home health aide, respite care, adult day care, personal care attendants, health-care equipment, and technology that helps the family member function safely. Ordinary home upkeep does not count — so this is not a backdoor credit for general household repairs. Think care costs, not routine maintenance. (cga.ct.gov) ### Why bundle it into an affordability bill? Because that gave it a better path to passage. A caregiver tax credit had been moving through the legislature on its own this session, but the winning version got absorbed into the budget-and-tax package that leaders were already pushing across the finish line. Basically, if you want a new tax break to survive in Hartford, attaching it to the main aff(cga.ct.gov)happened here. (cga.ct.gov) ### So is this locked in now? Not quite. The bill heads to Gov. Ned Lamont, and the bigger issue is budget pressure. On May 1, Comptroller Sean Scanlon projected a $109.0 million General Fund deficit for FY2026, up sharply from a $6.0 million projected deficit a month earlier, even while the state still shows a much larger surplus across all accounts and a full rainy-day fund. That weird (cga.ct.gov)udget picture is getting politically touchier. (osc.ct.gov) ### Why does that matter for caregivers? Because tax credits are easy to celebrate when surpluses are huge, and harder to defend when revenue softens. The caregiver credit is now real policy with a start date, but its long-term durability will depend on whether Connecticut can keep funding affordability measures without reopening its endless fight over fiscal guardrails and off-cap spending. (osc.ct.gov) ### Bottom line? This is a concrete win for family caregivers in Connecticut. It will not cover everything, and because it is nonrefundable it will help some households more than others. But for families already paying out of pocket to keep an older or disabled relative supported at home, the state finally decided those costs count. (cga.ct.gov)